SDLT when the price includes chattels or goodwill

Stamp Duty Land Tax is charged only on the part of the price paid for the property itself, so a genuine payment for chattels, or for free goodwill on a business purchase, can be left out. Paragraph 4 of Schedule 4 to the Finance Act 2003 requires the split to be just and reasonable, and HMRC expects contemporaneous evidence that the items were separately negotiated and valued at second hand market value. A figure simply agreed in the contract is not enough.

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Why can part of the price be excluded?

SDLT is a tax on transactions in interests in real property. What is chargeable includes anything that is legally part of the property, such as buildings, structures and fixtures (SDLTM04005). Things that are not part of the property, such as moveable chattels, stock and goodwill that is separate from the premises, are outside the charge.

When one price buys both, it has to be divided. Paragraph 4(1) of Schedule 4 to the Finance Act 2003 (FA 2003) says consideration attributable partly to the property transaction and partly to another matter is apportioned on a just and reasonable basis. If the parties do not apportion it, or do so wrongly, paragraph 4(2) applies the tax as if it had been apportioned properly. Paragraph 4(3) treats consideration for what is in substance one bargain as attributable to all its elements, even if separate prices or separate contracts are used.

The rest of the rules on what counts as price are on the chargeable consideration page.

Is the figure in the contract binding on HMRC?

No. HMRC’s manual says an apportionment agreed between seller and buyer, for whatever purpose, may not be just and reasonable, and the buyer, who is solely responsible for the accuracy of the return, is expected to reconsider it before entering the figure (SDLTM04000). A seller may be happy to inflate the chattels figure because it costs them nothing, so HMRC looks at the substance.

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What counts as a chattel rather than a fixture?

An item is a fixture, and so part of the property, if it is attached to it. The question turns on the degree and purpose of the attachment, with most weight usually on purpose (SDLTM04010). HMRC will not give a full list, but confirms the following normally count:

Normally chattels (not chargeable)	Normally fixtures (chargeable)
Carpets, fitted or not	Fitted kitchen units, cupboards and sinks
Curtains and blinds	Agas and wall mounted ovens
Free standing furniture	Fitted bathroom sanitary ware
White goods, unless fully integrated	Central heating systems
Electric and gas fires removable without damage	Intruder alarm systems
Light shades	Plants, shrubs and trees growing in the soil

The same principles apply to commercial purchases that include plant and machinery. Equipment that can be removed by undoing a few bolts is unlikely to be a fixture, while heavy plant integral to the building, or whose removal would cause damage, such as lifts, escalators, boilers and walk in refrigerators, is likely to be one. Tenant’s fixtures in England and Northern Ireland are fixtures even though the tenant may remove them (SDLTM04010).

How should chattels be valued?

HMRC’s view is that each chattel should be valued at open market value, including depreciation, at the effective date of the transaction, taking account of its age, quality and condition. For many items that will be substantially lower than what they cost new (SDLTM04010). The question is what a buyer would pay for used curtains and a five year old sofa, not what they cost.

In most house purchases HMRC expects the whole price to relate to the property, with no apportionment to chattels appropriate (SDLTM04010). A deduction is justified where valuable items genuinely change hands.

What evidence does HMRC expect?

A deduction for chattels is accepted only if the buyer can provide contemporaneous evidence from the conveyancing process that the figure is genuine and came from a separate negotiation for those items, for example because they were expressly identified and priced in the sale contract. Showing that some chattels were in the property at completion is not sufficient (SDLTM04010). Good practice is:

an itemised list with a price for each item, agreed during the negotiation and attached to the contract;
notes of how each price was reached, such as second hand values for comparable items;
for business assets, a valuation report that follows the joint HMRC and Valuation Office Agency practice note on apportioning the price of a going concern.

The apportionment is a common subject of HMRC enquiries. If HMRC challenges it, the Valuation Office Agency is involved and an itemised schedule of the chattels, their condition and open market value at the effective date is obtained (SDLTM04010). The valuation is the buyer’s responsibility, not HMRC’s (SDLTM80350).

How is goodwill treated on a business purchase?

Goodwill is not automatically excluded. Some of what is called goodwill is part of the value of the property itself, traditionally called inherent goodwill, and that is chargeable. Only goodwill separate from the property, sometimes called free goodwill, is outside SDLT (SDLTM04005). The exclusion of goodwill from stamp duty in section 116 of the Finance Act 2002 does not apply to SDLT.

The practice note, published on GOV.UK, says the various statutes do not define the method, but the price should be split between the assets on the basis of their relative values and their contribution to the price. HMRC and the Valuation Office Agency value goodwill as the residue: the going concern price less the value of the tangible assets, which are the property and the chattels. The note says HMRC has seen increasingly large sums allocated to goodwill in order to reduce SDLT, and accepts that goodwill may be nominal or substantial depending on the facts.

For trade related property such as pubs, hotels, restaurants and care homes, the note says the property should be valued as it actually was at the valuation date, trading and fitted out, not as an empty shell stripped of chattels and licences. Assuming a bare building depresses the property value and inflates goodwill. The established trading history is part of the property value.

How is the split reported on the return?

Where the purchase is part of the sale of a business, question 1 on form SDLT4 asks the buyer to tick the categories of non chargeable assets included (stock, goodwill, chattels and moveables, other) and give the total consideration apportioned to them, on a just and reasonable basis (SDLTM62780). Payments for fixtures and for goodwill that is part of the property go into the chargeable consideration on the SDLT1. If the non chargeable assets were transferred for nothing, the total box is left blank rather than showing zero.

HMRC can open an enquiry within nine months after the filing date, or after the date of delivery or amendment if later (FA 2003 Schedule 10, paragraph 12). An inaccurate SDLT return can attract penalties under Schedule 24 to the Finance Act 2007. If an apportionment turns out to be too generous, consider amending the SDLT return.

What does a reasonable apportionment look like?

Illustration only. A buyer agrees £450,000 for a house. During negotiations the seller offers to leave a dining table and chairs, a sofa, curtains, rugs and a free standing fridge freezer. The parties price each item at second hand value, totalling £3,800, and list them in a schedule to the contract.

The SDLT return shows £446,200 for the property.
The fitted kitchen, built in oven and bathroom stay in the chargeable figure as fixtures.
If the seller had instead suggested £20,000 for the same items with no list, HMRC would be likely to treat the full £450,000 as chargeable.

Which mistakes come up most often?

Using cost or replacement value for chattels instead of depreciated open market value.
Treating fixtures, such as kitchens and boilers, as chattels.
Adding a chattels figure after the price is agreed, with no separate negotiation on record.
On a business purchase, allocating most of the price to goodwill by valuing the property as if it were empty and stripped.
Forgetting that the buyer alone signs off the return and carries the risk.

See also how SDLT works and, for the rate treatment of business premises, mixed use property.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.